Correlation Between Guangdong Jingyi and CSSC Offshore
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By analyzing existing cross correlation between Guangdong Jingyi Metal and CSSC Offshore Marine, you can compare the effects of market volatilities on Guangdong Jingyi and CSSC Offshore and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guangdong Jingyi with a short position of CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Jingyi and CSSC Offshore.
Diversification Opportunities for Guangdong Jingyi and CSSC Offshore
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guangdong and CSSC is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Jingyi Metal and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine and Guangdong Jingyi is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guangdong Jingyi Metal are associated (or correlated) with CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of Guangdong Jingyi i.e., Guangdong Jingyi and CSSC Offshore go up and down completely randomly.
Pair Corralation between Guangdong Jingyi and CSSC Offshore
Assuming the 90 days trading horizon Guangdong Jingyi Metal is expected to generate 1.57 times more return on investment than CSSC Offshore. However, Guangdong Jingyi is 1.57 times more volatile than CSSC Offshore Marine. It trades about 0.01 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.0 per unit of risk. If you would invest 788.00 in Guangdong Jingyi Metal on November 9, 2024 and sell it today you would lose (23.00) from holding Guangdong Jingyi Metal or give up 2.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Jingyi Metal vs. CSSC Offshore Marine
Performance |
| Timeline |
| Guangdong Jingyi Metal |
Risk-Adjusted Performance
Insignificant
Weak | Strong |
| CSSC Offshore Marine |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Guangdong Jingyi and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Jingyi and CSSC Offshore
The main advantage of trading using opposite Guangdong Jingyi and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Jingyi position performs unexpectedly, CSSC Offshore can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.The idea behind Guangdong Jingyi Metal and CSSC Offshore Marine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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